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The airline was founded as Ostfriesische Lufttaxi (OLT) in 1958 and became Ostfriesische Lufttransport (OLT) in 1970 (which existed until 2013 as a separate airline) in Emden. It was reorganised and renamed as DLT Luftverkehrsgesellschaft mbH on 1 October 1974 and began cooperation with Lufthansa in 1978 with short-range international routes.

By 1988 all operations were on behalf of Lufthansa. In March 1992 DLT became a wholly owned subsidiary of Lufthansa and was renamed Lufthansa CityLine. Lufthansa CityLine employs 2,332 people, of whom 664 are cockpit crew, 849 cabin crew and 819 work in the technical and administrative areas (as of December 31, 2011).[4]

It was previously headquartered at Cologne/Bonn Airport.[5] In May 2013 it has been announced that the management and administration offices of CityLine will be relocated from Cologne to Munich.[6] As of September 2014 the move has been completed.[1]

In late 2014, parent company Lufthansa announced it would begin transferring eight of its current Airbus A340-300 aircraft to CityLine. After reconfiguration to a high-density configuration, these aircraft will be owned by CityLine and operated by CityLine pilots, but wet-leased back to Lufthansa to be used on leisure routes and serviced by Lufthansa cabin crews starting in 2015.[7]

On 28 December 1999, a passenger on board Lufthansa Flight 5293 from Prague to Düsseldorf, which was operated by Lufthansa CityLine using a Bombardier CRJ100 aircraft (registered D-ACJA), claimed to have a bomb on board and demanded the flight be diverted to the United Kingdom. The pilots convinced him to have a fuel stop at Düsseldorf International Airport, where all passengers left the plane (many of them unaware of the hijacking attempt), and the perpetrator was arrested.[13]

On 5 July 2014, Lufthansa Flight 1360 from Frankfurt to Katowice, operated by Lufthansa CityLine using a Bombardier CRJ700 aircraft (registered D-ACPJ), landed on an unopened and under construction runway at Katowice International Airport. The pilots performed a normal approach from the East in good conditions and visibility before landing on the closed runway. No one was hurt, and the aircraft later made a technical flight to land on the correct runway. The Polish State Commission on Aircraft Accidents Investigation made recommendations to add additional markings to the runway (in the form of red X shapes on the runway), and to modify the ATIS to include warnings about the closed runway. The CAT I ILS was disabled due to the construction, and the aircraft featured an older EGPWS that lacked a "Smart Landing" mode and high resolution map of the area which prevented it from informing the crew of the situation. During the approach, PAPI and threshold lights were set to maximum brightness. The incident is still being investigated by Polish authorities.[14]